Honey Portfolio (P) Ltd., New Delhi V. ITO, New Delhi

ITA 4431/DEL/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0827 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-06-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 12-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P C YADAV ADV SHRI NIDA FATIMA
• Keywords: Depreciation; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER ITA NO. 4431 /DEL/201 4 [ASSESSMENT YEAR: 2 0 03 - 04 ] M/S HONEY PORTFOLIO PVT LTD VS. THE I . T . O 1020/18, NALWALA, KAROL BAGH WARD 12 ( 4 ) NEW DELHI NEW DELHI PAN : AAACH 3404 J [APPELLANT] [RESPONDENT] DATE OF HEARING : 0 6 . 0 9 .201 8 DATE OF PRONOUNCEMENT : 1 4 .0 9 .2018 ASSESSEE BY : SHRI P.C. YADAV ADV. SHRI NIDA FATIMA, ADV. REVENUE BY : S HRI ANIL KUMAR SHARMA, SR. DR ORDER PER N .K. BILLAIYA, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] - XV , DELHI DATED 18 . 0 6 .201 4 PERTAINING TO ASSESSMENT YEAR 20 03 - 04 . 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 9. 4 4 LAKHS AND RS. 23,600/ - . 3. VIDE AN APPLICATION DATED 31.08.2015, THE ASSESSEE RAISED AN ADDITIONAL GROUND CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER FRAMED U/S 147 R.W.S 143(3) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT']. SINCE THE ADDITIONAL GROUN D GOES TO THE ROOT OF THE MATTER, I DECIDED TO PROCEED WITH THE ADDITIONAL GROUND FIRST. 4. THE BONE OF CONTENTION IS THE APPROVAL OBTAINED FROM THE ADDITIONAL CIT(A), RANGE 12, NEW DELHI. IT HAS BEEN STRONGLY CONTENDED THAT APPROVAL IS A MECHANICAL AP PROVAL WITHOUT ANY APPLICATION OF MIND AND, THEREFORE, THE ENTIRE REASSESSMENT PROCEEDINGS ARE VITIATED AS BAD IN LAW. 5. I DEEM IT PROPER TO EXHIBIT THE APPROVAL OF THE ADDITIONAL CIT, RANGE - 12, NEW DELHI AND THE SAME READS AS UNDER: 3 NAME & ADDRESS OF T HE ASSESSEE M/S HONEY PORTFOLIO PRIVATE LIMITED 322 DHAKA CHAMBER, 2068/39 , NAIWALA KAROL BAGH NEW DELHI - 05. PAN WARD AAACH3404J STATUS COMPANY WARD ITO, WARD - 12(4), NEW DELHI ASSESSMENT YEAR IN RESPECT OF WHICH IT IS PROPOSED TO ISSUE NOTICE U/S 148 2003 - 04 THE QUANTUM OF INCOME WHICH HAS ESCAPED ASSESSMENT. 9,44,000/ - WHETHER THE PROVISIONS OF SECTION 147 (A) OR 147 (B) APPLICABLE OR BOTH THE SECTIONS ARE APPLICABLE. SECTION - 147 WHETHER THE ASSESSMENT IS PROPOSED TO BE MADE FOR THE FIRST TIME, IF THE REPLY IS IN THE AFFIRMATIVE PLEASE STATE ( A ) WHETHER ANY VOLUNTARY RETURN HAD ALREADY BEEN FILED AND ( B ) IF SO, THE DATE OF FILING THE SAID RETURN. YES YES RETURN OF INCOME OF RS. 1290 - WAS FILED ON 02/12/2003 VIDE RECEIPT NO. 1244000873 WITH, WARD - 12 (4), NEW DELHI. IF THE ANSWER TO ITEM NO. 8 IS IN THE NEGATIVE, PLEASE STATE. ( A ) THE INCOME ORIGINALLY ASSESSED ( B ) WHETHER IT IS A CASE OF UNDER ASSESSMENT, ASSESSMENT AT TOO LOW A RATE, ASSESSMENT WHICH HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF OR ALLOWING OF EXCESSIVE LOSS OR DEPRECIATION. N.A. WHETHER THE PROVISIONS OF SECTION 150 (1) ARE APPLICABLE. IF THE REPLY IS IN AFFIRMATIVE, THE RELEVANT FACTS MAY BE STARED AGAINST ITEM NO. 11 AND IT MAY ALSO BE BROUGHT OUT THAT THE PROVISIONS OF SECTION 150 (2) WOULD NOT STAND IN THE WAY OF INITIATING PROCEEDINGS U/S 147 NO REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. AS PER ANU:XURE - A DATED: 22/03/2009 (YOGESH NA YYAR) INCOME TAX OFFICER, WARD - 12(4), NEW DELHI. WHETHER THE ADDL. COMMISSIONER/ BOARD IS SATISFIED ON THE REASONS RECORDED BY THE ITO THAT IT IS A FIT CASE FOR THE ISSUE OF NOTICE U/S 148. GROUNDS OF SELECTION HAVE BEEN DEALT WITH ADEQUATELY WHILE FINALIZING THE ASSESSMENT YES [HAND WRITTEN] DATED: (INDERJIT SINGH) ADDL.COMMISSNER OF INCOME TAX, RANGE - 12 4 6. IN MY CONSIDERED VIEW, THE REOPENING OF AN ASSESSMENT U/S 147 OF THE ACT IS A POTENT POWER NOT TO BE LIGHTLY EXERCISED. I CERTAINLY CANNOT BE INVOKED CASUALLY OR MECHANICALLY. THE HEART OF THE PROVISION IS THE FORMATION OF THE BELIEF BY THE ASSESSING OFFICER AND THE SAME HAS TO BE CONSIDERED BY DUE APPLICATION OF MIND BY THE SUPERIOR AUTHORITY WHILE GRANTING APPROVAL. 7. FROM THE ABOVE EXHIBITED CHART, IT IS CLEAR THAT IN COLUMN NO. 12, THE ADDITIONAL CIT, WHILE GRANTING APPROVAL FOR ISSUE OF NOTICE U/S 148 OF THE ACT HAS SIMPLY MENTIONED YES. IN MY VIEW, THIS EXERCISE APPEARS TO HAVE BEEN RITUALISTIC AND FORMAL, RATHER THAN MEANINGFUL, WHICH WAS RATIONALE FOR SAFEGUARD FOR APPROVAL BY A HIGHER RANKING OFFICER. 8 . THE HON'BLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF S. GOYANKA LIME AND CHEMICAL 231 TAXMAN 73 HAS DEALT WITH A SIMILAR ISSUE IN WHICH THE JOINT COMMISSIONER, WHILE ACCORDING SANCTION ONLY STATED THAT I AM SATISFIED. THE 5 HON'BLE HIGH COURT, ON THIS, TOOK THE VIEW THAT THIS ACTION FOR SANCTION WAS WITHOUT APPLICATION OF MIND AND THIS WAS DONE IN A MECHANICAL MANNER AND, THEREFORE, THE HON'BLE HIGH COURT QUASHED THE ASSESSMENT ORDER. 9. THE HON'BLE SUPREME COURT DISMISSED THE SLP FILED BY THE REVENUE AGAINST THE AFOREMENTIONED JUDGMENT OF THE HON'BLE HIGH COURT OF MADHYA PRADESH IN 237 TAXMANN 0378. 10. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE JUDICIAL DECISIONS REFERRED TO HEREINABOVE, I AM OF THE OPINION TH AT THE ASSESSMENT ORDER SO FRAMED IS BAD IN LAW AND DESERVES TO BE QUASHED. I ORDER ACCORDINGLY. 11. SINCE I HAVE QUASHED THE ASSESSMENT ORDER, I DO NOT FIND IT NECESSARY TO DWELL INTO THE MERITS OF THE CASE. 6 1 2 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 4431/DEL/2014 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 4 . 0 9 .2018 . S D / - [N.K. BILLAIYA] ACCOUNTANT MEMBER DATED: 1 4 T H SEPTEMBER , 2018 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) ASST. REGISTRAR, 5. DR ITAT, NEW DELHI 7 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER